Under the terms of the agreement, a subsidiary of Sun Pharma will commence a tender offer for all outstanding common stock of DUSA at a price of $8 per share in cash, a 38% premium to the closing price on 7 November, the Indian company said on Thursday.

“The transaction has a total cash value of approximately $230 million. The transaction has been unanimously approved by the boards of directors of both companies and DUSA’s board has recommended that the company’s shareholders tender their shares pursuant to the tender offer,” it said in a statement.

This is the third sizeable foreign acquisition by Sun Pharma since 2008. Sun Pharma, which was founded in 1983 as a small unit in Kolkata with five drug formulations in its portfolio, has followed a strategy of making acquisitions to power future expansion while pursuing growth on its own. The company has made at least a dozen acquisitions, each time adding a different set of capabilities to its business.

“DUSA has proven technical capabilities in photodynamic skin treatments, with US Food and Drug Administration-approved manufacturing, and its business brings us an entry into dermatological treatment devices, where we see good growth opportunities,” managing director Dilip Shanghvi said in the statement.

An analyst with a foreign brokerage firm, who didn’t want to be identified, noted that Sun Pharma lacked a strong enough presence in the skincare market in both domestic and foreign markets.

“The DUSA deal brings that strength for the company. However, this deal, as it seems similar to its Taro acquisition in 2009, may also face difficulties for completion as it involves share purchase from the market,” said the analyst. It was a reference to Sun Pharma’s purchase of Israel’s Taro Pharmaceutical Industries Ltd.

The stock purchase from the market through a tender will be subject to certain conditions, including the tender of at least a majority of DUSA’s outstanding shares (assuming the exercise of all options and warrants, and vesting of restricted shares).

Upon the completion of the tender offer, Sun Pharma will acquire all remaining stock at the same price of $8 per share through a second-step merger, subject to necessary approvals, said the Sun Pharmaceuticals statement.

“We are confident that Sun Pharma will build upon the solid foundation our organization has established in the US dermatology market,” stated Robert Doman, president and chief executive officer of DUSA Pharmaceuticals.

Sun Pharma, which announced its September quarter results on Thursday, posted a drop of about 47% in net profit at Rs.320 crore.

Profit was dented by a Rs.583 crore one-time expense on account of a liability arising from patent litigation with US drug maker Wyeth Pharmaceuticals Inc., a part of Pfizer Inc. Sun Pharma’s sales grew 41% during the quarter to Rs.2,683 crore.

Wyeth Pharmaceuticals had in February sought $960 million in damages from Sun Pharma for alleged patent infringement in launching a generic version of acid reflux drug Protonix in the US.

Sun Pharma said in its earnings statement on Thursday: “The company continues to believe that it has sound reasons to disagree with the overstated claim of Wyeth, and will pursue all legal remedies including appeals as it believe the patent referred in the litigation is invalid and unenforeable.”

Sun Pharma shares fell 0.76% to Rs.696.15 on BSE Ltd on Thursday, while the benchmark index, the Sensex, lost 0.3% to 18,846.26 points.